NIFTY THIS WEEK [03/05/10 – 07/05/10]
This week traded in a wide range with negative bias. Weekly volume remained same as last week. FII’s were net sellers for 4252.55 crores! In the weekly price chart nifty, had advanced for 9 weeks by giving continuous up closing. It had advanced from 4755 levels in the month of February to 5362 levels in the month of April by gaining around 800 points. In addition, it started to consolidate for 3 weeks and finally corrected this week. This week, nifty had corrected around 250 points. On witnessing the trend and FII’s selling, I have two views:
One is, according to Fibonacci numbers, we may consider this week correction of 250-odd points, as 1/3rd retracement i.e. roughly 38%, as a profit booking.
Second is, as nifty unable to surpass the important level 5383 which is significant for a bull trend, we may consider this week correction as a trend reversal.
Based on the former view we may see another 10% downside retracement or an up move in a tight range.
Based on the latter view, as this week a wide range black candle had formed with huge FII’s selling we may see further downside correction from here. Let’s see what happens next week.
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